Many people started experimenting with the idea of cryptocurrencies during the nineties tech boom. Though much innovation occurred during this period, ultimately, all of these efforts failed due to complex problems like fraud and financial difficulties.

Cryptocurrencies’ official origin are linked back to 2009 when anonymous programmer Satoshi Nakamoto emerged. After watching the failures of other cryptocurrency systems, Satoshi created an innovative system that worked around the existing structural issues. This innovation ultimately led to bitcoin.

Bitcoin created the phenomenon of cryptocurrency. Many other digital currencies have emerged on the market since this occurred. Cryptocurrency is becoming more and more mainstream, and more companies are now accepting it as a legitimate form of payment. Additionally, executives are thinking strategically about how digital currency will affect their businesses down the road.

Cryptocurrencies are essential to our society because they are revolutionizing monetary transactions all over the world. Virtual currencies are permissionless and irreversible, so many people see these types of payments as a disruption to the traditional control of formal institutions.

While every type of cryptocurrency is unique and complex, at its core virtual currency is a decentralized medium of exchange based on cryptography. Fundera developed an infographic that outlines the basics of the cryptocurrency system. Read on to better understand virtual currency.

About the Author: 

Meredith Wood is Editor-in-Chief at Fundera. Specializing in financial advice for small business owners, Meredith is a current and past contributor to Yahoo!, Amex OPEN Forum, Fox Business, SCORE, AllBusiness and more.